10 Stocks Hedge Funds Are Crazy About Right Now

6. Visa Inc. (NYSE:V)

Number of Hedge Fund Investors In Q1 2024: 166

Visa Inc. (NYSE:V) is one of the largest payment processors in the world. Its size and heft offer it stability even in a troubling economy due to the simple fact that customers and retailers are unlikely to make a costly and time consuming switch to alternatives. Like sizeable SaaS companies, Visa Inc. (NYSE:V) needs to retain its market through new initiatives and products, and by doing so, it’ll be able to grow and retain its current stature in the market, save off nominal or black swan events. 2024 is also a crucial year for Visa Inc. (NYSE:V)’s retailer partnerships since while it and Mastercard agreed to a $30 billion settlement after decades of transaction processing fees, a judge in New York has hinted that she might strike the deal down.

Additionally, while some feel that the acquisition of Discover by Capital One might shake things up for Visa Inc. (NYSE:V), this concern isn’t on the mind of fund Wedgewood Partners who shared in its Q1 2024 investor letter:

Visa stock posted a small negative drop during the quarter. In the 2irst quarter, the Company grew earnings per share +11% as payment volume growth was up +8% and cross-border payment grew a solid +16%, adjusted for currency. Beyond their consistent growth and execution, recent regulatory trends have caught considerable investor attention. The Company’s networks and value-added services drive enough economic value to bank customers and retailers that the addressable market for payments should continue growing at a healthy rate for many more years, regardless of recent regulatory changes. Visa’s value- added services can be extended to less-sophisticated, emerging non-Visa networks to help grow the overall payment ecosystem that make up the vast global payment addressable market. For example, not long after debit interchange rates were regulated last decade, Visa began an aggressive push to allow non-bank 2inancial institutions access to Visa’s networks, which helped drive more interchange volume to banks and offset lower interchange rates. This was a key element that spawned the massive “Fintech” industry that exists today. We continue to expect Visa’s scale and breadth of service offerings will help them drive attractive growth at stellar margins along with the overall payments’ ecosystem.